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Insuring Against Data Loss Losses

Matt Hines reports on a growing market for corporate insurance, responding to concerns about breach laws, in “Dark Day Planning: Insuring Against Data Loss:” [link to http://www.eweek.com/article2/0,1895,2073528,00.asp no longer works]

As a result of the widening impact of data losses, AIG has seen its business of providing insurance for potential corporate security failures shift increasingly toward protection for privacy-related risks. Another growing driver for new forms of insurance is the many government data compliance regulations that threaten stiff penalties for companies that cannot effectively defend their information, such as the Sarbanes-Oxley Act, according to Callahan.

Can someone explain to me why the world is going to end if we have to report breaches? Unpredictable costs are apparently going away.

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